Sevidal v. Target Corp.

APPEAL from an order of the Superior Court of San Diego County, Timothy Taylor, Judge. Affirmed. (Super. Ct. No. 37-2007-00082193-CU-BT-CTL).

The opinion of the court was delivered by: Haller, J.

CERTIFIED FOR PUBLICATION

After purchasing three clothing items from Target Corporation's Web site that were misidentified as made in the United States, Raymundo Sevidal brought a class action against Target, alleging fraud and violation of unfair competition and false advertising laws, and seeking injunctive and restitutionary relief. Sevidal then moved to certify a class of California consumers who bought imported items from Target's Web site that were similarly misidentified. Sevidal argued that under the California Supreme Court's recent decision in In re Tobacco II Cases (2009) 46 Cal.4th 298 (Tobacco II), the class could be certified on his unfair competition claim even if most of the proposed class members never relied on the "Made in USA" designation in deciding to make their online purchases.

The trial court agreed with Sevidal's interpretation of Tobacco II on the reliance element, but declined to certify the class because it found Sevidal did not meet his burden to establish other necessary elements of a class action, including that the proposed class was ascertainable. The court additionally found the proposed class was overbroad because the evidence showed that most class members were never exposed to Target's online country-of-origin designation.

Sevidal appeals. We affirm. We determine the court properly refused to certify the class based on its finding the proposed class was not ascertainable. Substantial evidence supports the court's conclusion the absent class members could not be reasonably identified by reference to records or by common characteristics that would allow the class members to identify themselves. We also determine the court properly found the class was overbroad because the evidence shows the vast majority of absent class members never saw the Web page containing the alleged misrepresentation and thus were never exposed to the alleged wrongful conduct.

FACTUAL AND PROCEDURAL BACKGROUND

Complaint and Class Allegations

In May and June 2007, Sevidal purchased three clothing items from Target's Web site -- two pairs of running shorts and one necktie. Information on the Web site stated the items were made in the United States. However, when the items were delivered, Sevidal discovered the items had labels showing they were made outside the United States.

Sevidal sought to represent the class of persons who purchased imported goods from Target's Web site that were incorrectly identified as " 'Made in USA.' "*fn2 Sevidal alleged this class consists of "thousands of persons" and thus separate joinder would be impractical. Sevidal further alleged: common questions of law and fact predominate; Sevidal's claims "are typical of the claims of each member of the class"; Sevidal "has the same interest in this matter as all other members of the class"; and "[t]he prosecution of separate claims by each individual member of the class would create a risk of inconsistent or varying adjudications." Sevidal sought injunctive relief, monetary damages, restitution, and attorney fees on behalf of the class members.

Target responded by moving for an order denying class certification, based, in part, on its argument that individual questions would predominate because each class member would be required to establish individual reliance under Proposition 64's new UCL standing requirements.*fn3 Two months later, the California Supreme Court filed the Tobacco II decision, clarifying that with respect to the UCL, Proposition 64 standing requirements apply only to class representatives, and not to unnamed class members. (Tobacco II, supra, 46 Cal.4th at pp. 314-324.) Target then withdrew its motion to deny certification, but stated the dismissal was without prejudice to reasserting its motion in the future.

Sevidal's Class Certification Motion

Sevidal then moved for an order certifying a class consisting of " 'any California consumer who purchased any product from Target.com on or after November 21, 2003 which was identified on Target.com as 'Made in USA,' when such product was actually not manufactured or assembled in the United States.' "

In support, Sevidal produced his declaration, stating: "On May 5, 2007 and on June 10, 2007, I purchased merchandise on the Target.com website. I purchased two pairs of . . . running shorts and one . . . necktie . . . all of which were identified on Target.com as 'Made in the USA.' [¶] . . . I relied on the representation that the merchandise was 'Made in the USA,' and purchased these items believing that the merchandise was made by American workers in the United States. Had the merchandise been labeled 'Imported' rather than 'Made in the USA,' I would have considered purchasing other similar merchandise labeled instead as 'Made in the USA.' [¶] . . . I am a military services member who has served in Iraq. It is important to me to purchase merchandise made by American workers because I want to repay the support that the American people have given me and my family. [¶] . . . I have since discovered that the merchandise that I purchased on Target.com was actually made outside of the United States, in China, Indonesia, and Jordan. [¶] . . . I believe that I would be an adequate class representative and would dutifully fulfill this role."

Sevidal also submitted evidence produced by Target, in which Target acknowledged it had erroneously identified some imported items on its Web site as " 'Made in US.' " According to this evidence, Target found that a "computer bug" had inadvertently caused imported clothing items to be displayed as " 'Made in US' " at certain times and at other times the same clothing item would be correctly identified as made outside the United States. This evidence showed Target discovered the problem in 2007, and by June 2008 Target had prepared and implemented a code change that eliminated the computer bug.

Sevidal also proffered an uncertified "rough" draft of a deposition transcript of Scott Affeldt, who is Target's "resident technical expert in applications and software design for item systems and item data." At his deposition, Affeldt initially testified that Target's error in mislabeling imported goods was "systematic" and agreed with Sevidal's counsel that it "seems reasonable" to conclude that these products were mislabeled from the time they were initially put on Target's Web site. However, three days after the deposition, Affeldt corrected this testimony based on his further investigation and clarified that the computer bug was triggered after an item had been published to the Web site. In the corrected and final version of the deposition, Affeldt testified that "it is not reasonable to assume that all items affected by the computer bug" had the incorrect designation when the items were first posted to the Web site. (Italics added.)

Sevidal also relied on his discovery request asking Target to identify all products advertised by Target as " 'MADE IN USA' during the four years preceding the filing of the complaint," and Target's responses in the form of hundreds of pages of spreadsheets, which identified thousands of product items that had been represented as " 'Made in USA,' " some of which were imported items.*fn4

Based on this and other evidence, Sevidal argued he met the standards for class certification, including that the proposed class was identifiable and ascertainable, common questions of fact and law predominate, Sevidal's claims are typical of the class, and Sevidal and his counsel will adequately represent the interests of the class.

Target's Opposition to Class Certification Motion

Target opposed the motion on three primary grounds: (1) the proposed class is not ascertainable; (2) the proposed class is overbroad; and (3) common issues do not predominate because the claims require individualized factual inquiries.

In support of these arguments, Target presented evidence to explain the manner in which the country-of-origin information manifested on its Web site. This evidence was as follows. Target's Web site offers for sale many categories of consumer products and allows the customer to browse through items by selecting subcategory tabs or to conduct a keyword search for an item. Upon selecting a subcategory or running a keyword search, the customer is directed to a screen displaying small photos and brief descriptions of items. This screen does not state whether each product is " 'Made in US' " or imported. Some items can be purchased from this screen by clicking the "Add to Cart" button, which takes a customer to the purchase screen.

Alternatively, the customer can choose a particular item by clicking on the " 'View Details' " button or on the name of that item, which causes the customer to be directed to an item-specific screen that displays a picture of the item, its price, and a more detailed description. This item-specific screen does not state the product's country of origin, but it provides an option to select size, color, and quantity, and invites the customer to click on " 'Add to Cart' " to purchase that item. Toward the bottom of the item-specific screen, there are four tabs labeled: " 'Features', 'Reviews', 'Additional Info, and 'Shipping Info.' " To view the information on each of these tabs (except the " 'Features' " tab), the customer must physically click on the tab. If the customer clicks the optional " 'Additional Info' " tab, the customer will see a separate screen that describes the item as either being " 'Made in US' " or " 'Imported.' " This is the only screen that shows whether a product is identified as " 'Made in US' " or " 'Imported.' "

Thus, once the customer reaches the item-specific screen, the customer purchases the item by selecting the " 'Add to Cart' " icon after clicking the applicable quantity and size/color tabs. At this point, the customer will not have seen whether an item is identified as " 'Made in US' " or " 'Imported' " unless the customer chose to click on the optional " 'Additional Info' " tab for that item. As a result a customer can log onto Target.com and purchase an item without ever seeing whether it is identified as " 'Made in US' " or " 'Imported.' "

In 2007, Target discovered that some clothing items were erroneously identified as " 'Made in US' " on the " 'Additional Info' " pages on its Web site. In 2008, Target's technical services department determined that this problem was caused by a computer bug in its programming language, which caused the country-of-origin attribute for some imported items to switch to " 'Made in US' " at various times. Target submitted a declaration of its technical computer expert (Affeldt), who stated that the bug was triggered when mass updates were made to any one of 200 attributes for "child" items in Target's computer software system, known as the PRISM system. In computer code language, a "parent" and "child" refer to an item and its attributes. For example, a "parent" is "[s]omething like a cardigan sweater" that "has multiple sizes, small, medium, large, extra large," each of which is a "child" item. There can be 200 child items for each parent item, and when any child item is changed, "the item changes are then propagated up to the parent." According to Affeldt, the country-of-origin computer bug problem manifested when a change was made to any one of the 200 child items for each parent item: "as [the computer system] is going through its comparison of each of the 200 fields, it comes to country of origin, it sees no change to country of origin, it treats it as null, it then -- the [computer] logic assumed a default and made it United States." Affeldt additionally stated that the computer bug sometimes affected the same item multiple times: "Some items . . . could have alternated between being correctly designated as 'Imported' and erroneously designated as 'Made in US' on the Target.com website many times on various dates. . . ."

Affeldt also stated that "Target's item database PRISM does not maintain historical information about the country of origin attribute which controls whether an item is listed as 'Made in US' or 'Imported'. . . . Instead, PRISM only reflects the current or most recent country of origin designation for each item. . . . Moreover, [Target has] no other records or databases . . . [that] maintain such historical country of origin information. As a result, even if it is known that a particular item had a 'US' country of origin designation at one point in time, there is no way for Target to determine the beginning and ending dates that the item had a 'US' country of origin in PRISM and therefore on the Target.com website." According to Affeldt, Target was unable to obtain this information from any other source, including Amazon.com Inc. (Amazon), which provides the "web platform" for Target's Web site. Affeldt explained that he was told by Amazon personnel "it would be a significant effort for Amazon to pull such information and that the data provided would be incomplete and unreliable at best."

Target also produced evidence showing that the vast majority of customers do not select the " 'Additional Info' " icon before making a purchase and thus are never exposed to the product's country-of-origin designation. Jinzhou Huang, a Target employee whose responsibilities include analyzing Web services for Target, submitted her declaration stating that: "Prior to 2009, Target did not track or collect data regarding whether or how often customers viewed the 'Additional Info' tab screen that indicates whether an item is 'Made in US' or 'Imported.' . . . [¶] . . . [¶] . . . Target [thus] has no record of whether specific customers who made purchases on Target.com between November of 2003 and January of 2009 ever viewed the 'Additional Info' tab prior to making a purchase. . . . [¶] . . . [¶] [However,] [b]eginning on February 13, 2009, Target formally implemented a new program that tracks the number of times visitors to the Target.com website click on the 'Additional Info' tab. [¶] . . . The data collected for the time period from February 13, 2009 to July ...

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